Scatec Solar ASA - Sustainability Report 2017 47

Contributing to local value creation

48

Our policyOur goal is to positively impact the societies in which we operate,

both directly and indirectly. We strive to employ local labour,

identify needs in the local communities for our community

development programmes and maintain open and transparent

dialogue with relevant stakeholders.

Our policy is to:• Employ local labour, enable knowledge transfer and

generate job creation in local communities• Use local suppliers whenever feasible• Plan for and contribute to local development initiatives• Train and educate our people on how best to operate in a

new, often foreign culture • Develop a structured stakeholder engagement plan for

all projects at an early stage to help us inform and com-

municate with parties that are going to be affected by the

project. • Appoint a designated community liaison officer in our

projects to facilitate understanding and communications in

local communities• Maintain an active dialogue during the project phases

with the local communities and engage with communities

at several levels, from national governments to project

neighbours to ensure open and integrated communication

Solar power plants impact local communities. Changes

are usually positive, bringing social, economic and infra-

structure improvements. But the possibility of unintended

consequences cannot be overlooked. Potential main impacts

of our projects on local communities can include physical

and economic displacement, changes in vegetation and

infrastructure and increased activity levels in the area.

Impacts during construction (traffic, noise, dust and similar)

are considered limited and effectively mitigated if and where

nearby communities exist.

Further, we often operate in countries where legal frame-

works and governing structures do not necessarily protect

the communities we may impact to the same extent as in more

mature economies. Community and stakeholder engagement

is therefore central to our way of doing business. In all our

operating projects, we have local community engagement and

impact assessments. The integration of a project is a critical

part of stakeholder engagement. If not carried out in a timely

and integrated manner this can lead to misinterpretations

and concerns in local communities.

To ensure local support and a well conducted community

dialogue when entering a local community, we employ

international norms for stakeholder engagement, such as the

IFC Performance Standards. All our projects have assigned

a Community Liaison Officer (CLO) who is responsible for

community engagement and maintaining good relations with

the local communities. A formalised stakeholder analysis and

stakeholder engagement plan is always carried out in accord-

ance with the expectations set out in the IFC Performance

Standards and the Equator Principles. We also implement a

grievance mechanism for all our projects, available locally at the

project site and on our corporate website. Since our establish-

ment, we have also gained considerable experience when it

comes to working with local communities in different countries,

and we always try to build upon this knowledge.

Contributing to local value creation

Economic value

NOK MILLION GROUP

Total revenues and other income 1,492

Operating costs (includes depreciation, amortization and impairment) 404

Personnel expenses 95

Payments to providers of capital (dividends and interest payments) 549

Payments to governments (only includes income tax) 17

Community investments N/A

Economic value retained N/A

Scatec Solar ASA - Sustainability Report 2017 49

Our achievements and results in 2017 Local Job Creation

Without income generation, no community is stable or

sustainable. Scatec Solar is strongly committed to contributing

to job creation, and we employ local labour and suppliers as far

as possible, regardless of whether this is a requirement or not.

This contributes to reducing unemployment rates and provides

knowledge and technical skills transfer to the communities

where we are present.

Most of the jobs created through our projects originate during

the construction phase, which usually lasts between 6-14

months. Workers are provided with important technical skills

and experience that make them more eligible for future jobs.

The graph below shows the local job creation during peak

construction from all of our projects since our establishment.

The number of jobs totals 5,410, with the percentage of local

employees averaging about 80%.

During 2017, we started construction activities in Malaysia,

Brazil and Honduras. We seek to employ local labour as far

as possible in these countries. In Honduras for example, we

have committed to employ 80% of unskilled labor from the

communities surrounding the plant. Read more about the local

recruitment process in the case study on the next page.

Percentage of local job creation from all our solar projects during peak construction period 1)

Percentage of local employees hired

1) Figures are not available for Czech Republic and Jordan.

2) The 104 MW Utah Red Hills project was sold during fourth quarter 2016

0

20

40

60

80

100

USA 2)RwandaSouth AfricaHonduras

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During 2017 in preparation of the construction phase of the Los Prados project in Honduras several meetings were

held with the four community boards to address the local recruitment process.

The project has a commitment to hire 80% of unskilled labor from these communities during the construction

phase. As part of the outcome of the process a Letter of Understanding was signed with community representatives

and the project with the Namasigue Mayor as a witness of honor of the process.

The first step of the process involved getting a census of available people to work in the project. Over 650 people

enrolled in the census, showing their disposition to work in the project. During the recent construction of the

substation, 103 people from local communities have so far worked in the project.

Local recruitment in Honduras:

Scatec Solar ASA - Sustainability Report 2017 51

We also try to hire locally for the permanent positions in the

various stages of our value chain including engineers, plant

managers, HSSE experts, civil and mechanical workers, security

personnel and community liaison officers to mention a few.

The table below shows some examples of permanent local job

creation on a senior management level and other positions

across our projects in operation.

Local supply chain development

Scatec Solar strives to use and strengthen local supply chains

and entrepreneurs to the extent possible in our local opera-

tions. We seek to procure and contract between 20-30% of

local goods and services such as accommodation, vehicles,

staff, fencing and civil contractors, depending on the country

and availability of goods and services. Once aw solar plant is

in operation, we usually achieve a minimum level of 60–80%

of local contracts of goods and services.

Stakeholder Engagement in local communities

There are various ways in which projects engage with local

communities. To inform the communities on the project and

potential impacts, manage expectations and to ensure local

support and understanding of our projects, regular meetings

with local leaders and representatives from local communities

are held in all the local communities where we have presence.

For example, in Jordan 34 stakeholder meetings were held

during 2017, which were mostly with local communities and

authorities such as the Maan governor and municipality,

Maan parliament, Maan public hospital and youth club and

the Ministry of Education to mention some. It is important

to highlight that local stakeholder engagement for us means

our presence and interaction with local communities on a

regular and ongoing basis. Topics and issued raised during

local stakeholder meetings that are considered material

are communicated to the management through biweekly

progress reports, usually from project managers or other

project team members

We usually experience a lot of engagement in local com-

munities during the initial project phases of development

and construction. Stakeholder meetings in Malaysia, Brazil,

Mozambique and Honduras have been an important part of

our stakeholder engagement efforts in 2017. In Honduras,

we experienced social unrest from members of the local

communities surrounding the project in conjunction with

construction startup. We have worked together with

community members, central and local authorities, and other

important stakeholders to resolve the situation and establish

a trust based dialogue. As with all projects, our approach

has been carried out in line with international standards and

recommendations.

Prior to activities in the local community we developed

an Environmental and Social Impact Assessment with a

corresponding plan to mitigate and manage impacts. We also

developed a Stakeholder Engagement plan and implemented

local initiatives of social projection to meet basic needs in

critical social areas such as education and health.

Permanent local job creation for plants in operation

PERMANENT EMPLOYEES 2017

Senior management level

Plant Managers 9

Other Levels

Operation & Maintenance operators 32

Community Liaison Officers 8

Contractors

Security guards 63

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Community dialogue and engagement indicators

2017 2016 2015

Percentage of operations with implemented local community engagement, impact assessments, and development programmes

100% 100% 100%

Number of grievances received 118 16 19

Number of grievances addressed and resolved 103 10 19

In 2017, we established a new internal system for handling grievances on our company’s intranet to standardize the process of

reporting and managing grievances. All relevant employees received training in the new system. We are currently in a process

of transition to the new system in all locations.

Grievance mechanism

Scatec Solar has a publicly available grievance mechanism for all

projects through the corporate website and at each local project

site. The grievance mechanism is targeted towards individuals,

communities and companies who have feedback or concerns

regarding our projects. It is a channel to present issues to the

administration of the projects and is directly supervised by

the sustainability unit. All grievances are taken seriously, and

we aim to have a response time of maximum 30 working days.

The mechanism is available in five different languages on our

website: English, Arabic, Spanish, Portuguese and French, and

represents a valuable platform for engaging with communities.

The number of grievances received during 2017 for all pro-

jects in operation, under construction and in backlog totaled

118. The large increase from previous years is primarily due

to additional projects under development or construction,

which usually represents the phases with most feedback

and concerns from stakeholders of the projects. Of the total

number of grievances, 67 related to the Mocuba project in

Mozambique. Many of these grievances were connected to

the resettlement programme that was carried out during the

year and were mostly concerns from locals affected by the

programme. The majority of the grievances were solved by

communicating our processes and principles and engaging

with the local communities on a regular basis, apart from four

grievances that were still in the process of being resolved by

the end of the year. These were all resolved during the first

month of 2018. The remaining 11 unresolved grievances

from other locations are still being addressed and resolved.

Scatec Solar ASA - Sustainability Report 2017 53

Local development programmes

Scatec Solar plans and implements community development

programmes in all the local communities where we have oper-

ations. The projects under the programs are identified in close

dialogue with local stakeholders and in consultations with

local community members in order to address the prioritized

needs and significant social challenges of the communities.

We have aligned our sustainability vision with the UN’s

Sustainable Development Goals (SDGs) and our community

development programmes are bracketed within several of the

goals. The next pages highlight some of our key community

development initiatives from 2017 with corresponding goals.